Simpson Thacher & Bartlett
Simpson Thacher & Bartlett
Founded: 1884 as Simpson, Thacher & Barnum
Sales: $434 million (1999)
NAIC: 54111 Offices of Lawyers
Simpson Thacher & Bartlett consistently ranks as one of the world’s great law firms. It serves large corporate clients, smaller startup companies, foundations, government entities, and individual clients. Its legacy includes representing important corporate clients in the railroad, utility, banking, and other industries. Because it helps clients deal with taxation, antitrust, financing, mergers and acquisitions, litigation, intellectual property, and other concerns, it is a full-service law firm that can deal with virtually any legal specialty. Unlike some of its major rivals, the Simpson law firm operates only a few branch offices, and the large majority of its lawyers work out of its New York headquarters. At the same time, its extensive international practice makes it a major influence in the global economy, in part because of cooperative agreements with foreign law firms.
Origins and Early Practice
On January 1, 1884, three former clerks of the law firm of Alexander & Green formed their own law firm called Simpson, Thacher & Barnum in lower Manhattan. John Woodruff Simpson had graduated from Amherst College in 1871 and attended Columbia University Law School for two years before joining Alexander & Green. Both Thomas Thacher and William Milo Barnum had graduated from Yale and Columbia University Law School before working for Alexander & Green.
The new law firm at first represented a variety of businesses, such as mining, gas, and telegraph companies, along with individuals who needed help in lawsuits, estates, and wills. Then, starting in 1885, it spent more time helping railroads that were reorganizing during a period of consolidation of a very fragmented industry. Early clients included the New Orleans, Baton Rouge & Vicksburg, the Ohio Central, the Baltimore & Ohio, and the New York, West Shore and Buffalo railroads, plus locomotive manufacturers.
The Simpson law firm in 1895 assisted the Brooklyn Union Gas Company in its set-up and acquisition of seven other local gas companies. This process of uniting several small utilities companies into one significant provider was a common trend in many American cities around the turn of the century.
Around 1900 the partnership served several companies that eventually became the International Silver Company. The firm in 1901 helped the Union Bag and Paper Company start up, and it remained a client for many years. In 1901 the firm also participated in the American Can Company’s consolidation and helped found the American Locomotive Company. In 1904 Philip Bartlett became a name partner when William Barnum retired. The firm in 1905 participated in the Northern Securities litigation in which the railroad monopoly was broken up by the federal government under the 1890 Sherman Antitrust Act.
As the firm’s lawyers gained experience, they represented a greater variety of clients. A book published on the firm’s centennial notes: “By 1911 the firm represented companies manufacturing or dealing in such varied articles as terra cotta, shoes, shock absorbers, bread, plate glass, tires, and men’s clothing.”
In the 1920s, as foreign trade increased, Simpson Thacher began developing an international practice to assist its clients. It also began serving investment banks that helped finance steamship lines, New York Harbor dry docks, dairies, and other diverse businesses. The partnership in 1921 helped start one of New York City’s first cooperative apartments to meet the increased housing demand as a multitude of immigrants arrived through Ellis Island.
Although the firm’s practice generally declined in the 1930s, it did pick up clients from bankruptcy, reorganization, and real estate work during the Depression. In 1937 partner Whitney North Seymour, at the request of the American Civil Liberties Union, argued successfully in the U.S. Supreme Court case Hemndon v. Lowry “that a black communist could not constitutionally be punished for insurrection when charged with inducing others to become members of the Communist Party,” according to Conrad K. Harper in the law firm’s 1984 retrospective.
In 1935 the federal government passed the Public Utility Holding Company Act that had long-term legal consequences for Simpson Thacher clients. Representing Electric Bond and Share Company, the firm challenged the new law’s constitutionality, which in 1938 was upheld by the U.S. Supreme Court. In the 1940s and 1950s the law firm spent much time representing Electric Bond and Share in front of the Securities and Exchange Commission and dealing with lawsuits against the holding company from its subsidiaries and other parties.
Meanwhile, the firm’s client Radio-Keith-Orpheum Corporation received much publicity during its reorganization that lasted from 1936 until after the United States entered World War II. About the same time, Simpson Thacher worked on the reorganization of the Wabash Railway that was completed in 1951. During the war, the firm helped its clients gain war-related contracts for a variety of weapons and parts. In the 1940s Edwin Weisl joined Simpson Thacher and brought in as new clients Lehman Brothers and Paramount Communications, then called Gulf & Western.
After the war ended, the firm continued defending corporations accused of antitrust violations. One notable case was Ferguson v. Ford Motor Company. More than 30 Simpson Thacher lawyers helped Ford on this case that ran from 1948 to 1952, when it was finally settled.
In 1952 Simpson Thacher became general counsel to Manufacturers Trust Company, which led to the hiring of many experienced lawyers from the firm of Newman & Bisco. In 1953 the firm represented the newly created New York City Transit Authority when it took over facilities formerly operated by New York City.
Starting in 1952, the Simpson law firm played a key role in the early years of developing peaceful uses for atomic energy. It participated in complex contracts and financing involving the Ohio Valley Electric Corporation (OVEC), its subsidiary Indiana-Kentucky Electric Corporation, several sponsoring private utilities, 39 institutional investors, the Atomic Energy Commission, several other federal agencies, Congress, and also seven state regulatory commissions. Eventually two large plants were built that provided 18 billion kilowatt-hours annually.
In 1969 Simpson Thacher became “the first major law firm to make an African-American attorney a partner,” according to The Insider’s Guide to Law Firms. Litigator Conrad Harper, the former president of the New York City Bar Association, remained with Simpson Thacher until he accepted a State Department position in the early 1990s.
In the booming economy of the 1980s, stimulated by a reduction in federal tax rates, Simpson Thacher grew and prospered. It went from 325 lawyers in 1987 to 448 in 1990, and its gross revenue almost doubled in only three years, from $103 million in 1986 to $201 million in 1989. In addition to its long-term client Manufacturers Hanover Trust, the law firm also served Atlas Corporation, General Motors, and Burmah Oil.
Simpson Thacher & Bartlett was one of the few major law firms, all headquartered in New York, that benefited from the numerous mergers and acquisitions of the 1980s. For example, in 1988 the firm represented investment bank Wasserstein, Perella & Co. that was assisting Philip Morris in a $11.4 bid to take over Kraft.
The partnership in 1989 served as the main law firm for Kohlberg Kravis Roberts & Company when it spent $25.3 billion in a leveraged acquisition of RJR Nabisco Inc. The financing for what the Wall Street Journal on February 10,1989 called “the largest corporate acquisition ever” was completed when at least 150 lawyers and others gathered in a Simpson Thacher conference room.
In 1984 the firm self-published a book to mark its one hundredth anniversary. However, the volume contained little detailed information on the firm’s history. The one exception was an essay on the career of Whitney North Seymour, who practiced from 1923 to 1983 at Simpson Thacher & Bartlett, except for 1931 to 1933 when he served as the U.S. assistant solicitor general. A leader in the civil rights movement, Seymour’s contributions included being president of the American Bar Association, the American Bar Foundation, and the Institute of Judicial Administration during the 1960s.
Practice in the 1990s and Beyond
Cyrus R. Vance, among the most famous Simpson attorneys, continued to practice law in the 1990s. He had joined the firm after World War II and served as President Lyndon Johnson’s deputy secretary of the Defense Department. In 1967 Vance helped mediate an end to the Detroit riots. Vance also served as President Carter’s secretary of state, and in the early 1990s he worked to try to bring peace to Yugoslavia. Called the “ultimate troubleshooter” by Time in 1992, Vance in 1994 was chosen to mediate the bankruptcy reorganization of R.H. Macy & Company.
We believe that the talent of our associates is considerable, as we consistently attract the nation’s top law students. Associates and partners alike demonstrate commitment to communities as well as clients, making substantial and ongoing pro bono contributions across a breadth of not-for-profit issues and organizations. The Firm values these efforts, much as we value good judgment, creativity and efficiency in client matters. With more than five hundred fifty lawyers practicing in seven offices around the world, we strive to demonstrate these values and excellence as firm-wide characteristics.
In the 1990s Simpson Thacher & Bartlett opened new offices to better serve its clients. Partner Paul B. Ford founded the firm’s Tokyo office in 1990 when the Japanese economy was strong. Later in the decade several other American law firms closed their Japanese offices when the Tokyo stock market stagnated, and the yen weakened, but Simpson Thacher kept its office open, based on a belief in the long-term strength of the Japanese economy.
In 1993, 421 of Simpson Thacher & Bartlett’s 436 attorneys were based in New York City. Its London office had nine attorneys, while the Tokyo office included three attorneys. The firm also had three attorneys in its Columbus, Ohio office, started because its client American Electric Power Company was headquartered in Columbus. Other notable clients at that time were General Electric, Travellers Insurance, Seagrams, Ford, Barclays Bank, Matsushita, and Lehman Brothers.
In the 1990s American law firms chose different strategies as they opened or expanded their London offices. Some firms chose to hire English lawyers, while others, like Simpson Thacher, staffed their London offices with American lawyers. “Our perspective has been that UK firms have needed some US capability, not that the US firms need an English capability,” said Simpson Thacher partner Rhett Brandon in the December 1995 International Financial Law Review. (A third option, a trans-Atlantic merger, was demonstrated in 2000 when London’s Clifford Chance merged with a New York law firm and also a German firm.)
Simpson Thacher & Bartlett in the 1990s played a major role in consolidating American banks. For example, in 1991 it represented C&S/Sovran Corporation; Manufacturers Hanover Corporation; First Hawaiian, Inc.; and Norwest Corporation in various deals. In 1992 the firm’s long-term client Manufacturers Hanover merged with Chemical Bank. According to The Insider’s Guide to Law Firms, the Simpson law firm “was temporarily shaken by the merger because Chemical Bank continues to use its counsel, Cravath, Swaine & Moore.” But by 1994 Simpson Thacher was “reportedly primary counsel to Chemical and handles all aspects of the bank’s securities offering work.”
The Simpson law firm represented Chemical Banking Corporation when it announced in August 1995 that it was merging with Chase Manhattan Corporation. According to Simpson Thacher partner Lee Meyerson in the July 1996 Corporate Finance, the merger created “the largest banking organization in the US (by a wide margin) and one of the largest in the world.”
In other merger and acquisition (M&A) work, the Simpson law firm in 1995 represented Glaxo plc in its purchase of Wellcome plv, a $15 billion transaction; The Seagram Company in its $8.8 billion sale of E.I. duPont de Nemours stock; and Matsushita Electric Industrial Company when it sold 80 percent of MCA Inc. to Seagram for $5.7 billion. Other 1995 clients in transactions worth at least $1 billion included ITT, Kemper, Yucaipa, Frontier, Ingersoll-Rand, National Gypsum, and MCI Communications.
Other examples of Simpson Thacher & Bartlett’s M&A work included advising KN Energy Inc. in its 1997 acquisition of gas pipeline company MidCom Corporation from Occidental Petroleum for $3.49 billion. In 2000 the Simpson firm represented the telecommunications company Global Crossing when it acquired IPC Communications and its subsidiary IXnet.
Business Week, in the February 28, 2000 issue, ranked Simpson Thacher as the top mergers and acquisitions law firm based on its $893.3 billion worth of deals in 1999. Eight of the top ten firms were based in New York City. As of September 30, 2000, Simpson Thacher & Bartlett was ranked second in its M&A work, with its $553.4 billion in deals exceeded by only Sullivan & Cromwell with $753.8 billion.
Meanwhile, the firm opened its Los Angeles office in 1996 to serve the entertainment industry and other clients. In 1999 the partnership opened its Silicon Valley office in Palo Alto, California to serve the growing number of Internet and high-technology businesses. That office’s clients included Agilent Technologies, Andersen Consulting, CNET, Drugstore.com, iSyndicate.com, NBC Internet, Intel, and investment banks working with high-tech companies. By 2000 the Palo Alto branch had expanded to about 30 lawyers.
Following successful litigation against the tobacco industry, gun manufacturers in the late 1990s began to be sued for the many deaths and injuries resulting from handgun use. The manufacturers turned to some of the nation’s largest law firms for assistance. For example, Colt’s Manufacturing Company in 1999 asked Simpson Thacher for legal counsel.
The American Lawyer in its annual rankings of the nation’s highest grossing law firms in 1999 listed Simpson Thacher & Bartlett as number 12 based on the firm’s $434 million in 1999 revenue. The firm also was listed as one of the “Winners of the Nineties” based on its 87 percent growth of profits per partner since 1990. That impressive track record indicated Simpson Thacher & Bartlett was well prepared for the challenges of the new millennium.
- Simpson, Thacher & Barnum is formed in New York City.
- The name is changed to Simpson, Thacher & Bartlett.
- Firm represents the Electric Bond and Share Company.
- Firm becomes the first in the United States to name an African American partner.
- Firm represent Kohlberg Kravis Roberts & Company in its $25.3 billion acquisition of RJR Nabisco.
- The firm’s Tokyo office is opened.
- The firm opens its Los Angeles office.
- The Palo Alto office is opened.
Cleary, Gottlieb, Steen & Hamilton; Davis Polk & Wardwell; Wachtell, Lipton, Rosen & Katz.
“American Law Firm Upbeat Over Japanese Economic Outlook,” Mainichi Daily News (Tokyo), April 1, 1997, p. 1.
Baldo, Anthony, “Richards Layton Top M&A Law Firm in US in 1991,” Investment Dealers’ Digest, May 25, 1992, p. 15
Barrett, Paul M., and Milo Geyelin, “Big National Law Firms Leap to Help Gun Industry as It Fights Suits by Cities,” Wall Street Journal, July 14, 1999, p. B7.
Cherovsky, Erwin, “Simpson Thacher & Bartlett,” in The Guide to New York Law Firms, New York: St. Martin’s Press, 1991, pp.183–186.
Cohen, Laurie P., “Takeover Boom Is Expected to Benefit Usual Small Circle of Wealthy Law Firms,” Wall Street Journal, October 25, 1988, p. 1.
Lipin, Steven, “Legal Eagle Makes Firm One of Top M&A Advisers,” Wall Street Journal, June 1, 1995, p. C1.
Lipin, Steven, and Peter Fritsch, “KN Energy to Buy Occidental’s MidCon-Deal, Valued at $3.49 Billion, Will Create Behemoth in Pipeline Industry,” Wall Street Journal, December 19, 1997, p. A,3.1.
McNatt, Robert, “Top 10 M&A Law Firms,” Business Week, February 28, 2000, p. 6.
Malkani, Sheila V., and Michael F. Walsh, ed., “Simpson Thacher & Bartlett,” in The Insider’s Guide to Law Firms, 2d ed., Boulder, Colo. Mobius Press, 1994, pp. 419–22.
Meyerson, Lee, “Home Teams Have the Edge in US Bank Mergers,” Corporate Finance (London), July 1996, p. 49.
Reilly, Patrick M., and Laura Jereski, “Vance Is Named as a Mediator in Macy Case,” Wall Street Journal, February 23, 1994, p. A3.
Roberts, Gwenan, “No Holds Barred in the City,” International Financial Law Review, December 1995, p. 20.
“Simpson Thacher Advises on Financial Network Deal,” International Tax Review, April 2000, p. 9.
Simpson Thacher & Bartlett: The First One Hundred Years, 1884–1984, New York: Simpson Thacher, 1984.
Talbot, Strobe, “The Ultimate Troubleshooter,” Time, March 9, 1992, p. 37.
Waldman, Peter and George Anders, “KKR Completes Buy-Out of RJR Without Fanfare—Sound of No Corks Popping Greets History’s Largest Corporate Acquisition,” Wall Street Journal, February 10, 1999, p. 1.
—David M. Waiden